114 CMR, § 40.04 - Rates of Payment for Services Provided to Publicly-Aided Individuals

(1) Applicability. Rates of payment determined under the rules of 114.1 CMR 40.04 shall include:

(a) Payment for all inpatient, outpatient, and well-newborn hospital care and services which are provided by a non-acute hospital to publicly-aided patients.

(b) Payment for administrative days which are provided by a non-acute hospital to publicly aided individuals under Title XIX of the Social Security Act.

(2) General Payment Provisions.

(a) Reimbursement as Full Payment. Each non-acute hospital which provides hospital care and service to publicly-aided individuals shall, as a condition to receipt of payment, accept reimbursement at rates established by the Division, subject to appellate rights set forth in M.G.L. c. 118G, as full payment and discharge of all obligations of such individuals. There shall be no supplementation or duplication of payment.

(b) Reimbursement Limitation. Reimbursement determined under 114.1 CMR 40.04 shall not exceed the reimbursement which would result from application of the Principles of Reimbursement of Provider costs established under 42 U.S.C. §§ 1395 et seq., the Medicare Act.

1. For each fiscal year the Division shall calculate the percentage, if any, by which non-acute hospitals' Medicaid payment on account factors (PAFs) must be adjusted in order for the Division of Medical Assistance to comply with the upper limit requirements on Medicaid inpatient and outpatient hospital payments as specified in 42 CFR 447.272 and 42 CFR 447.321. The Division shall calculate the upper limit separately for inpatient services and outpatient services.

2. The Division shall determine whether reimbursement determined under 114.1 CMR 40.00 exceeds the upper limit by comparing the aggregate amount that the Medicare program would pay for Medicaid patients using Medicare principles to the aggregate amount that would be paid using the Medicaid payment on account factors calculated pursuant to 114.1 CMR 40.04 applied to rate year Medicaid charges. If the aggregate payment amount pursuant to 114.1 CMR 40.00 is greater than the aggregate payment amount using Medicare principles, an upper limit adjustment is necessary.

3. If an upper limit adjustment is necessary, the Division shall issue an administrative bulletin setting forth the methodology for calculating such adjustment.

(3) Rates for Administrative Day Patients. The rate for inpatient services provided to Administrative Day Patients shall be calculated as follows:

(a) For eligible routine services furnished to administrative day patients, the FY 1996 rate of payment will be the lesser of $111 per patient day or the PAF determined pursuant to 114.1 CMR 40.04(4) times the hospital's approved routine charge.

(b) For eligible routine services furnished to administrative day patients, the FY 1997 rate of payment will be the lesser of $113.27 per patient day or the PAF determined pursuant to 114.1 CMR 40.04(4) times the hospital's approved routine charge.

(c) For eligible ancillary services furnished to administrative day patients, the rate of payment shall be equal to the PAF determined pursuant to 114.1 CMR 40.04(4) times the approved charge for the service.

(4) Payment on Account Factor. For all eligible services supplied to publicly assisted patients, other than those cited in 114.1 CMR 40.04(3), the rate of payment shall be equal to the product of the PAF and the approved charge for the service.

(a) The FY 1996 PAF shall be computed by dividing the RFR determined pursuant to 114.1 CMR 40.06 by the Approved GPSR for the corresponding rate year, as approved under 114.1 CMR 38.00.

If a hospital's approved GPSR is revised pursuant to 114.1 CMR 38.00, the PAF shall be revised to reflect the new approved GPSR. The PAF shall not be revised to reflect changes in RFR made pursuant to 114.1 CMR 38.00.

In no event shall the PAF exceed 100%.

(b) The FY 1997 PAF shall be computed by dividing the FY 1997 RFR by the FY 1997 GPSR. For hospitals with a rate year beginning 7/1/96, the FY 1997 GPSR shall be the GPSR calculated using the FY 1997 RSC-440 as reviewed and adjusted by the Division. For hospitals with a rate year beginning 10/1/96, the FY 1997 GPSR shall be the FY 1996 GPSR as approved by the Division. This PAF shall remain in effect unless adjusted as described below or until it is superseded by new regulation or a contract with the Division of Medical Assistance.

1. Determination of the Medicaid PAF shall be made in accordance with the information filed on the DHCFP-450 Form.

2. The PAF shall be adjusted downward prospectively, pro-rated for months remaining in the rate year, if the charge per day as reported in the DHCFP-450 Form increases beyond an allowable increase. The allowable increase shall equal the FY 1996 to FY 1997 inflation factor, as calculated pursuant 114.1 CMR 40.08(2), multiplied by the greater of 1 or the ratio of FY 1997 RFR to FY 1996 RFR.

3. The adjustment factor shall equal the product of:

a. the inflation factor divided by the sum of one plus the percent increase in charges; and

b. the greater of one or the ratio of FY 1997 RFR to FY 1996 RFR.

4. The pro-rated adjustment shall be determined as follows:

a. Step One:

i) the adjustment factor multiplied by the total number of months in the year that the increased charges are in effect less

ii) the number of months that the increased charges are in effect before the adjusted PAF will take effect.

b. The pro-rated adjustment shall equal Step One of the adjustment as calculated above divided by the number of months remaining in the year after the adjusted PAF will take effect.

5. The current PAF shall be multiplied by the pro-rated adjustment factor as calculated pursuant to 114.1 CMR 40.04(4)4.

6. The Division will determine the lower of the PAF adjusted in 114.1 CMR 40.04(b)5. or the PAF currently in effect and will approve a change in the PAF, if applicable, to take effect the first day of the month following the Division's approval.

(c) In addition to the initial rate of payment, a supplementary payment shall be made for all eligible services supplied by non-acute hospitals to publicly-assisted patients who are not given administrative day status. This supplementary payment shall equal the following:

Total Supplementary Payment =

Total Routine Charges for Administrative Day Patients x PAF - $113.27 x Number of Administrative Days

(d) The supplementary payment shall be payable by the Division of Medical Assistance to the hospital.

Notes

114 CMR, § 40.04